The 2 reasons US college endowments suffered in 2015

Colleges and universities in the US received a record $40.3 billion in charitable giving in 2015, according to an annual survey by the Council for Aid to Education (CAE).

But that charitable giving did not come in the form of endowment giving, which actually saw a year-on-year decrease.

The reason for that decrease was twofold, according to CAE. First, endowment giving saw a massive increase in 2014, where gifts to restricted endowments increased 23.3%. By virtue of that high baseline, it was difficult to for 2015 to achieve similarly historic contributions.

Second, the stock market performance was weaker in 2015 than 2014. So, for the total endowment portfolio, returns were not as strong.

That was likely a tough pill to swallow for portfolio managers as endowment earnings are a highly competitive venture. Endowment funds are closely watched, just like competitive Wall Street funds, with schools jockeying to produce the best portfolio results.

Endowment growth also provides major funds for a school’s operating budget.

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